Systems and methods for token-based cross-currency interoperability

ABSTRACT

Systems and methods for token-based cross-currency interoperability are disclosed. In one embodiment, in a first financial institution information processing apparatus comprising at least one computer processor, a method for conducting a token-based cross-currency transaction may include: (1) receiving, from a first party, a transaction initiation request for a transaction amount to a second party; (2) deducting the transaction amount from a fiat currency account for the first party; (3) creating a token amount of tokens for the transaction amount; (4) writing the token amount to a distributed ledger; and (5) transferring the token amount of tokens to a second financial institution for the second party.

RELATED APPLICATIONS

This application claims the benefit of U.S. Provisional PatentApplication Ser. No. 62/725,331, filed Aug. 31, 2018, the disclosure ofwhich is hereby incorporated, by reference, in its entirety.

BACKGROUND OF THE INVENTION 1. Field of the Invention

The present disclosure generally relates to systems and methods fortoken-based cross-currency interoperability.

2. Description of Related Art

As more financial technology companies enter the cross-border paymentspace, multiple types of digital tokens are emerging. These tokens arenot interoperable, making it difficult to transact across borders andplatforms.

SUMMARY OF THE INVENTION

Systems and methods for token-based cross-currency interoperability aredisclosed. In one embodiment, in a first financial institutioninformation processing apparatus comprising at least one computerprocessor, a method for conducting a token-based cross-currencytransaction may include: (1) receiving, from a first party, atransaction initiation request for a transaction amount to a secondparty; (2) deducting the transaction amount from a fiat currency accountfor the first party; (3) creating a token amount of tokens for thetransaction amount; (4) writing the token amount to a distributedledger; and (5) transferring the token amount of tokens to a secondfinancial institution for the second party.

In one embodiment, the first party may operate in a first currency, andthe second party may operate in a second currency.

In one embodiment, the token amount may be created in a standardcurrency.

In one embodiment, the first currency and the standard currency may bethe same.

In one embodiment, the fiat currency account may include a line ofcredit.

In one embodiment, the second financial institution may credit the tokenamount to an account for the second party.

In one embodiment, the distributed ledger may include an immutable andcryptographically-verifiable distributed ledger.

According to another embodiment, in a first financial institutioninformation processing apparatus comprising at least one computerprocessor, a method for conducting a token-based cross-currencytransaction may include: (1) receiving, from a second financialinstitution, a token amount of tokens for a transaction from a firstparty to a second party; (2) crediting the token amount to a fiatcurrency account for the second party; and (3) writing the credit of thetoken amount to a distributed ledger.

In one embodiment, crediting the token amount to a fiat currency accountfor the second party may include redeeming the token amount to the fiatcurrency.

In one embodiment, the method may further include destroying the tokensfor the token amount.

According to another embodiment, in a first financial institutioninformation processing apparatus comprising at least one computerprocessor a method for conducting a token-based cross-currencytransaction may include: (1) receiving, from a first party, atransaction initiation request for a transaction amount in a firstcurrency to a second party in a second currency; (2) deducting a firsttoken amount of tokens for the transaction amount from an electronicwallet for the first party; and (3) initiating the transaction bywriting the first token amount to a distributed ledger. A secondfinancial institution may exchange the first token amount in the firstcurrency for a standard token amount in a standard currency, mayexchange the standard token amount in the standard currency to a secondtoken amount in the second currency, and may transfer the second tokenamount in the second currency to a third financial institution for thesecond party.

In one embodiment, the method may further include issuing tokens for thefirst currency to the electronic wallet for the first party.

In one embodiment, the step of deducting a first token amount of tokensfor the transaction amount from an electronic wallet for the first partymay include deducting the first token amount of tokens for thetransaction amount from a line of credit for the first party.

In one embodiment, the first currency and the standard currency may bethe same currency.

In one embodiment, the first financial institution and the secondfinancial institution may be the same.

In one embodiment, the second financial institution and the thirdfinancial institution may be the same.

BRIEF DESCRIPTION OF THE DRAWINGS

In order to facilitate a fuller understanding of the present invention,reference is now made to the attached drawings in which:

FIG. 1 discloses a system for token-based cross-currencyinteroperability according to one embodiment;

FIG. 2 discloses a method for conducting token-based cross-currencytransactions according to one embodiment;

FIG. 3 discloses a method for settlement of token-based cross-currencytransactions according to another embodiment;

FIG. 4 discloses a system for token-based cross-currencyinteroperability according to one embodiment; and

FIG. 5 discloses a method for conducting token-based cross-currencytransactions according to one embodiment.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

Systems and methods for token-based cross-currency interoperability aredisclosed. In embodiments, a token bridge between currencies may beused. The token bridge may be based on the United States dollar; othercurrencies may be used as is necessary and/or desired. For example, afinancial institution that issues the tokens may provide foreignexchange between the U.S. dollar tokens and other tokenized andnon-tokenized currencies.

In one embodiment, the tokens created may be persisted so that once thetokens are created, they may be used as currency, may earn interest,etc. For example, the tokens may be settled for cash at the end of theday, in the future, based on a position, etc.

Referring to FIG. 1, a system for token-based cross-currencyinteroperability is disclosed according to one embodiment. System 100may include a plurality of clients (e.g., client A 110 and client B140), and a plurality of banks (e.g., Bank A 120 and Bank B 130).Although clients 110 and 140 are depicted as individuals, it should berecognized that clients 110 and 140 may be any suitable entity,including individuals, groups of individuals, organizations, companies,etc.

Client 110 may be associated with token wallet 115, and client 140 maybe associated with token wallet 145. Token wallets 115 and 145 may bemaintained on a distributed ledger (not shown). In one embodiment, tokenwallets 115 and 145 may store tokens representing currency.

Bank 120 and bank 130 may be associated with customers 110 and 140,respectively. Each bank may facilitate the creation, transfer, anddestruction of tokens representing currency. In one embodiment, client110 and bank 120 may primarily operate in a first currency, and client140 and bank 130 may operate in a second currency.

In one embodiment, bank 120 and bank 130 may participate as nodes in adistributed ledger, and each bank 120 and 130 may maintain a copy thedistributed ledger (e.g., copy of ledger 125 and 135).

Although FIG. 1 depicts two banks, it should be recognized that agreater number of banks may participate as is necessary and/or desired.

In one embodiment, bank 120 and bank 130 may be the same bank.

In one embodiment, additional networks, such as a payment network (notshown) may be provided.

Referring to FIG. 2, a method for conducting token-based cross-currencytransactions is disclosed according to one embodiment. In thisembodiment, the transaction may be a cross-border transaction, but itmay be within the same currency (e.g., U.S. dollars).

In step 205, Client A, a client of Bank A, may initiate a payment toClient B for amount A.

In step 210, Bank A may deduct Client A's account for amount A. In oneembodiment, this may be a draw down from Client A's line of credit.

In step 215, Bank A may create Amount A of tokens in a standardizedcurrency (e.g., U.S. dollars) and may write the transaction on adistributed ledger, such as a blockchain-based ledger. In oneembodiment, if Client A and Bank A primarily operate in a currency otherthan U.S. dollars, any necessary currency conversion may be performed.

In one embodiment, any cryptographically-verifiably, immutable ledgermay be used as is necessary and/or desired. Examples includeBlockchain-based ledgers, Ethereum-based ledgers, etc.

In step 220, Bank A may transfer the tokens to Bank B, and writes thetransfer to the distributed ledger.

In step 225, Bank B may receive the tokens, and in step 130, Bank B maycredit the amount of tokens to Client B's account. In one embodiment,Client B and Bank B primarily operate in a currency other than U.S.dollars, any necessary currency conversion may be performed.

In step 230, Client B may redeem the tokens for currency.

Referring to FIG. 3, a method for settlement of token-basedcross-currency transactions is disclosed according to one embodiment. Instep 305, at settlement, Bank B may redeem the tokens with Bank A for astandardized currency, such as U.S. dollars.

In step 310, Bank A may destroy the amount of tokens redeemed on thedistributed ledger. This may be by any suitable method.

In step 315, Bank A may settle with Bank B by moving the amount to BankB. This may be a standard cash movement.

Referring to FIG. 4, a system for token-based cross-currencyinteroperability is disclosed according to another embodiment. System400 may include a plurality of clients (e.g., client A 410 and client B440), and a plurality of banks (e.g., Bank A 420, Bank B 430, and Bank X450). Clients 410 and 440 may be similar to clients 110 and 140described above, and Banks 420 and 430 may be similar to banks 120 and130, described above.

Bank 450 may provide foreign exchange services for a transaction. In oneembodiment, bank 450 may also be a node in the distributed ledger, andmay maintain copy of the distributed ledger 455.

In one embodiment, additional networks, such as a payment network (notshown) may be provided.

Referring to FIG. 5, a method for conducting token-based cross-currencytransactions is disclosed according to one embodiment. In thisembodiment, the transaction may be a cross-border transaction, and maybe in different currencies (e.g., MXN to INR).

In step 505, Client A (e.g., in Mexico) may initiate a payment of anamount in currency A to Client B (e.g., in India) in currency B. Forexample, the payment may be in MXN to INR.

Currency A Token Bank and Currency B Token Bank may hold Client A's andClient B's money, respectively, in their own native fiat currencies.Both Currency A Token Bank and Currency A Token Bank may issue tokensrepresenting their own native fiat currencies using, for example, themethod of FIG. 2.

In step 510, Client A's Wallet A may deduct the amount from Client A'saccount. In one embodiment, Wallet A may deduct the amount from ClientA's line of credit. In one embodiment, Wallet A may be a suitableelectronic wallet that may be tracked on a distributed ledger.

Although wallets are disclosed in this embodiment, it should beunderstood that accounts with each client's respective bank may bemaintained instead. Regardless of whether wallets or accounts are used,the tokens are backed by assets at an anchor bank (e.g., Currency AToken Bank).

In step 515, Wallet A may initiate a transfer of the amount of tokens inCurrency A on a distributed ledger.

In response to Wallet A initiating the transfer on the distributedledger, Currency A Token Bank may create and redeem tokens in CurrencyA.

In step 520, Bank X may provide a foreign exchange rate and liquidity byexchanging tokens in a standard currency (e.g., U.S. dollar tokens) forCurrency A tokens, and then exchanging the standard currency tokens toCurrency B tokens.

In step 525, Bank B may create and redeem Currency B tokens. Wallet Bthen receives Currency B tokens from Bank A.

In step 530, Bank B may credit Client B with Currency B tokens.

Although embodiments may depict the token creation and redemption takingplace as part of the transaction, it should be noted that the tokencreation and/or redemption may occur at any suitable time. For example,tokens may be created before the transaction based on cash collateraland/or credit lines, and there may be a draw-down of the token balanceduring transaction initiation and execution.

In one embodiment, the token creation and/or redemption may occurindependent of a transaction, and the transaction may occur independentof the token creation and/or redemption.

Although the disclosure is in the context of tokenized cash or fiat, itshould be understood that credit, collateral, or any other type of assetmay be tokenized as is necessary and/or desired.

In embodiments, the representation of cash or fiat as tokens mayfacilitate other general banking services, in particular “Deliveryversus Payment,” or “DVP,” settlement. DVP is a settlement system thatstipulates that cash payment must be made prior to, or simultaneouslywith, delivery of the security and/or asset. The method for issuing fiatcurrency on the ledger for transactions may be used for issuance andsettlement of any type of security or asset by tokenizing the principaland/or the interest.

For example, a buyer may use tokenized currency to affect a secondarytrade of debt securities. Tokenized currency may be exchanged forsecurity interest ownership, and the distributed ledger may maintain arecord of the ownership transfer of the security as well as the parties'respective cash positions. Upon execution, the trade would be written tothe distributed ledger for clearing. After clearing, the tokenizedcurrency may be held or settled for actual fiat currency as discussedabove.

Hereinafter, general aspects of implementation of the systems andmethods of the invention will be described.

The system of the invention or portions of the system of the inventionmay be in the form of a “processing machine,” such as a general-purposecomputer, for example. As used herein, the term “processing machine” isto be understood to include at least one processor that uses at leastone memory. The at least one memory stores a set of instructions. Theinstructions may be either permanently or temporarily stored in thememory or memories of the processing machine. The processor executes theinstructions that are stored in the memory or memories in order toprocess data. The set of instructions may include various instructionsthat perform a particular task or tasks, such as those tasks describedabove. Such a set of instructions for performing a particular task maybe characterized as a program, software program, or simply software.

In one embodiment, the processing machine may be a specializedprocessor.

As noted above, the processing machine executes the instructions thatare stored in the memory or memories to process data. This processing ofdata may be in response to commands by a user or users of the processingmachine, in response to previous processing, in response to a request byanother processing machine and/or any other input, for example.

As noted above, the processing machine used to implement the inventionmay be a general-purpose computer. However, the processing machinedescribed above may also utilize any of a wide variety of othertechnologies including a special purpose computer, a computer systemincluding, for example, a microcomputer, mini-computer or mainframe, aprogrammed microprocessor, a micro-controller, a peripheral integratedcircuit element, a CSIC (Customer Specific Integrated Circuit) or ASIC(Application Specific Integrated Circuit) or other integrated circuit, alogic circuit, a digital signal processor, a programmable logic devicesuch as a FPGA, PLD, PLA or PAL, or any other device or arrangement ofdevices that is capable of implementing the steps of the processes ofthe invention.

The processing machine used to implement the invention may utilize asuitable operating system. Thus, embodiments of the invention mayinclude a processing machine running the iOS operating system, the OS Xoperating system, the Android operating system, the Microsoft Windows™operating systems, the Unix operating system, the Linux operatingsystem, the Xenix operating system, the IBM AIX™ operating system, theHewlett-Packard UX™ operating system, the Novell Netware™ operatingsystem, the Sun Microsystems Solaris™ operating system, the OS/2™operating system, the BeOS™ operating system, the Macintosh operatingsystem, the Apache operating system, an OpenStep™ operating system oranother operating system or platform.

It is appreciated that in order to practice the method of the inventionas described above, it is not necessary that the processors and/or thememories of the processing machine be physically located in the samegeographical place. That is, each of the processors and the memoriesused by the processing machine may be located in geographically distinctlocations and connected so as to communicate in any suitable manner.Additionally, it is appreciated that each of the processor and/or thememory may be composed of different physical pieces of equipment.Accordingly, it is not necessary that the processor be one single pieceof equipment in one location and that the memory be another single pieceof equipment in another location. That is, it is contemplated that theprocessor may be two pieces of equipment in two different physicallocations. The two distinct pieces of equipment may be connected in anysuitable manner. Additionally, the memory may include two or moreportions of memory in two or more physical locations.

To explain further, processing, as described above, is performed byvarious components and various memories. However, it is appreciated thatthe processing performed by two distinct components as described abovemay, in accordance with a further embodiment of the invention, beperformed by a single component. Further, the processing performed byone distinct component as described above may be performed by twodistinct components. In a similar manner, the memory storage performedby two distinct memory portions as described above may, in accordancewith a further embodiment of the invention, be performed by a singlememory portion. Further, the memory storage performed by one distinctmemory portion as described above may be performed by two memoryportions.

Further, various technologies may be used to provide communicationbetween the various processors and/or memories, as well as to allow theprocessors and/or the memories of the invention to communicate with anyother entity; i.e., so as to obtain further instructions or to accessand use remote memory stores, for example. Such technologies used toprovide such communication might include a network, the Internet,Intranet, Extranet, LAN, an Ethernet, wireless communication via celltower or satellite, or any client server system that providescommunication, for example. Such communications technologies may use anysuitable protocol such as TCP/IP, UDP, or OSI, for example.

As described above, a set of instructions may be used in the processingof the invention. The set of instructions may be in the form of aprogram or software. The software may be in the form of system softwareor application software, for example. The software might also be in theform of a collection of separate programs, a program module within alarger program, or a portion of a program module, for example. Thesoftware used might also include modular programming in the form ofobject oriented programming. The software tells the processing machinewhat to do with the data being processed.

Further, it is appreciated that the instructions or set of instructionsused in the implementation and operation of the invention may be in asuitable form such that the processing machine may read theinstructions. For example, the instructions that form a program may bein the form of a suitable programming language, which is converted tomachine language or object code to allow the processor or processors toread the instructions. That is, written lines of programming code orsource code, in a particular programming language, are converted tomachine language using a compiler, assembler or interpreter. The machinelanguage is binary coded machine instructions that are specific to aparticular type of processing machine, i.e., to a particular type ofcomputer, for example. The computer understands the machine language.

Any suitable programming language may be used in accordance with thevarious embodiments of the invention. Illustratively, the programminglanguage used may include assembly language, Ada, APL, Basic, C, C++,COBOL, dBase, Forth, Fortran, Java, Modula-2, Pascal, Prolog, REXX,Visual Basic, and/or JavaScript, for example. Further, it is notnecessary that a single type of instruction or single programminglanguage be utilized in conjunction with the operation of the system andmethod of the invention. Rather, any number of different programminglanguages may be utilized as is necessary and/or desirable.

Also, the instructions and/or data used in the practice of the inventionmay utilize any compression or encryption technique or algorithm, as maybe desired. An encryption module might be used to encrypt data. Further,files or other data may be decrypted using a suitable decryption module,for example.

As described above, the invention may illustratively be embodied in theform of a processing machine, including a computer or computer system,for example, that includes at least one memory. It is to be appreciatedthat the set of instructions, i.e., the software for example, thatenables the computer operating system to perform the operationsdescribed above may be contained on any of a wide variety of media ormedium, as desired. Further, the data that is processed by the set ofinstructions might also be contained on any of a wide variety of mediaor medium. That is, the particular medium, i.e., the memory in theprocessing machine, utilized to hold the set of instructions and/or thedata used in the invention may take on any of a variety of physicalforms or transmissions, for example. Illustratively, the medium may bein the form of paper, paper transparencies, a compact disk, a DVD, anintegrated circuit, a hard disk, a floppy disk, an optical disk, amagnetic tape, a RAM, a ROM, a PROM, an EPROM, a wire, a cable, a fiber,a communications channel, a satellite transmission, a memory card, a SIMcard, or other remote transmission, as well as any other medium orsource of data that may be read by the processors of the invention.

Further, the memory or memories used in the processing machine thatimplements the invention may be in any of a wide variety of forms toallow the memory to hold instructions, data, or other information, as isdesired. Thus, the memory might be in the form of a database to holddata. The database might use any desired arrangement of files such as aflat file arrangement or a relational database arrangement, for example.

In the system and method of the invention, a variety of “userinterfaces” may be utilized to allow a user to interface with theprocessing machine or machines that are used to implement the invention.As used herein, a user interface includes any hardware, software, orcombination of hardware and software used by the processing machine thatallows a user to interact with the processing machine. A user interfacemay be in the form of a dialogue screen for example. A user interfacemay also include any of a mouse, touch screen, keyboard, keypad, voicereader, voice recognizer, dialogue screen, menu box, list, checkbox,toggle switch, a pushbutton or any other device that allows a user toreceive information regarding the operation of the processing machine asit processes a set of instructions and/or provides the processingmachine with information. Accordingly, the user interface is any devicethat provides communication between a user and a processing machine. Theinformation provided by the user to the processing machine through theuser interface may be in the form of a command, a selection of data, orsome other input, for example.

As discussed above, a user interface is utilized by the processingmachine that performs a set of instructions such that the processingmachine processes data for a user. The user interface is typically usedby the processing machine for interacting with a user either to conveyinformation or receive information from the user. However, it should beappreciated that in accordance with some embodiments of the system andmethod of the invention, it is not necessary that a human user actuallyinteract with a user interface used by the processing machine of theinvention. Rather, it is also contemplated that the user interface ofthe invention might interact, i.e., convey and receive information, withanother processing machine, rather than a human user. Accordingly, theother processing machine might be characterized as a user. Further, itis contemplated that a user interface utilized in the system and methodof the invention may interact partially with another processing machineor processing machines, while also interacting partially with a humanuser.

It will be readily understood by those persons skilled in the art thatthe present invention is susceptible to broad utility and application.Many embodiments and adaptations of the present invention other thanthose herein described, as well as many variations, modifications andequivalent arrangements, will be apparent from or reasonably suggestedby the present invention and foregoing description thereof, withoutdeparting from the substance or scope of the invention.

Accordingly, while the present invention has been described here indetail in relation to its exemplary embodiments, it is to be understoodthat this disclosure is only illustrative and exemplary of the presentinvention and is made to provide an enabling disclosure of theinvention. Accordingly, the foregoing disclosure is not intended to beconstrued or to limit the present invention or otherwise to exclude anyother such embodiments, adaptations, variations, modifications orequivalent arrangements.

What is claimed is:
 1. A method for conducting a token-basedcross-currency transaction comprising: in a first financial institutioninformation processing apparatus comprising at least one computerprocessor: receiving, from a first party, a transaction initiationrequest for a transaction amount to a second party; deducting thetransaction amount from a fiat currency account for the first party;creating a token amount of tokens for the transaction amount; writingthe token amount to a distributed ledger; and transferring the tokenamount of tokens to a second financial institution for the second party.2. The method of claim 1, wherein the first party operates in a firstcurrency, and the second party operates in a second currency.
 3. Themethod of claim 1, wherein the token amount is created in a standardcurrency.
 4. The method of claim 3, wherein the first currency and thestandard currency are the same.
 5. The method of claim 1, wherein thefiat currency account comprises a line of credit.
 6. The method of claim1, wherein the second financial institution credits the token amount toan account for the second party.
 7. The method of claim 1, wherein thedistributed ledger comprises an immutable andcryptographically-verifiable distributed ledger.
 8. A method forconducting a token-based cross-currency transaction, comprising: in afirst financial institution information processing apparatus comprisingat least one computer processor: receiving, from a second financialinstitution, a token amount of tokens for a transaction from a firstparty to a second party; crediting the token amount to a fiat currencyaccount for the second party; and writing the credit of the token amountto a distributed ledger.
 9. The method of claim 8, wherein crediting thetoken amount to a fiat currency account for the second party comprises:redeeming the token amount to the fiat currency.
 10. The method of claim8, further comprising: destroying the tokens for the token amount.
 11. Amethod for conducting a token-based cross-currency transaction,comprising: in a first financial institution information processingapparatus comprising at least one computer processor: receiving, from afirst party, a transaction initiation request for a transaction amountin a first currency to a second party in a second currency; deducting afirst token amount of tokens for the transaction amount from anelectronic wallet for the first party; and initiating the transaction bywriting the first token amount to a distributed ledger; wherein a secondfinancial institution exchanges the first token amount in the firstcurrency for a standard token amount in a standard currency, exchangesthe standard token amount in the standard currency to a second tokenamount in the second currency, and transfers the second token amount inthe second currency to a third financial institution for the secondparty.
 12. The method of claim 11, further comprising: issuing tokensfor the first currency to the electronic wallet for the first party. 13.The method of claim 11, wherein the step of deducting a first tokenamount of tokens for the transaction amount from an electronic walletfor the first party comprises deducting the first token amount of tokensfor the transaction amount from a line of credit for the first party.14. The method of claim 11, wherein the first currency and the standardcurrency are the same.
 15. The method of claim 11, wherein the firstfinancial institution and the second financial institution are the same.16. The method of claim 11, wherein the second financial institution andthe third financial institution are the same.